M/S. W. T. SUREN & CO. LTD. vs THE COMMISSIONER OF INCOME TAX. BOMBAY

The Supreme Court addressed the issue of whether the payment of gratuity made by the assessee to M/s. Rallies India Ltd. was an allowable deduction under Section 66(1) of the Income-tax Act, 1922. The Court held that the payment was not an allowable deduction as it was not incurred in the course of business operations, emphasizing that deductions must be directly related to the business activities of the assessee. Consequently, the judgment of the Bombay High Court was upheld, ruling in favor of the revenue.